Foreign Buyers Check in to Hotel Fibra

Foreign Buyers Check in to Hotel Fibra

December 3, 2012

Better than anticipated foreign participation has boosted Concentradora Fibra Hotelera’s MXP4.14bn ($318m) IPO, the Mexican Fibra asset class’s second-ever fund and the first to focus on hotel properties. The deal was heard 4x subscribed, and a larger retap should eventually be in the cards, following the pattern of Fibra Uno, the market’s debut transaction. The fund operated by Mexican developer Grupo GDI sold 224m shares, including a 15% greenshoe, at MXP18.50 each, toward the low end of a MXP18.00-MXP21.00 range. The issuer placed 44% of the shares in the ex-Mexico tranche, indicating a higher portion going to international buyers than the fund initially estimated. “This is a reaffirmation of the Fibra structure, and that it travels well. The international market now understands the asset class,” says Augusto Arellano, senior MD at Evercore, which was the advisor and structuring agent on the transaction. Foreign buyers mostly came from the US, but also included London accounts and some Chilean participation, he says. Concentradora Fibra Hotelera had hoped for 10 foreign accounts and ended up with around 35, he adds. Eight Afores – more than Fibra Uno’s last sale – bought about 60% of the Mexican tranche. The fund includes 30 operating Mexican hotels and four in development, under the Fiesta Inn, One and Camino Real brands. About 86% of these hotels’ business is Mexican business travelers, offering a play on the growing dynamics of Mexico’s economy going forward, rather than the more volatile tourism sector. Proceeds will be used for acquiring and developing additional properties. BBVA and JPMorgan were global coordinators, with Evercore and Banorte-Ixe joining on the local portion. GDI specializes in hotels, malls and residential property development. Following a resurgence in Mexican equity issuance since September, several real estate players are lining up to issue the REIT-like Fibra transactions. “There is a lot of interest from Mexican institutions and priva

Better than anticipated foreign participation has boosted Concentradora Fibra Hotelera’s MXP4.14bn ($318m) IPO, the Mexican Fibra asset class’s second-ever fund and the first to focus on hotel properties. The deal was heard 4x subscribed, and a larger retap should eventually be in the cards, following the pattern of Fibra Uno, the market’s debut transaction. The fund operated by Mexican developer Grupo GDI sold 224m shares, including a 15% greenshoe, at MXP18.50 each, toward the low end of a MXP